European data concerns cloud outlook for US vendors

In a move that could set an important precedent for all EU states,American cloud providers may find themselves unable to sell to the Dutch government due to concerns that the vendors could be compelled to share data with US authorities under the provisions of the Patriot Act, while similar concerns are being raised in the European Parliament.

Ivo Opstelten, the Dutch minister of security and justice, informed the Tweede Kamer (the Dutch lower house) that the government is contemplating excluding American cloud providers from government bids. Dutch government agencies need to protect government information and citizen data from being accessed by the US, and so bids must be able to meet demands that cloud providers do not hand over any information to the US.

"That basically means that companies form the United States are excluded from such government bids and contracts," Opstelten said in the letter.

Excluding US cloud providers is not official policy yet. However, Vincent van Steen, spokesperson for the ministry of the interior, confirmed that the Dutch government is considering a ban on American cloud providers such as Microsoft and Google. "The minister is considering this," he said. "This means that it could be a requirement for tenders and the awarding of contracts."

Concerns over Patriot Act

Nigel Murray, managing director of the consultancy firm Huron Legal, confirmed the Patriot Act could override European data and privacy legislation in a report by Dutch IDG news site Webwereld. "If data is transferred to the United States under the Safe Harbour protocol or an American injunction, US Regulators can retrieve the data using the Patriot Act. This usually happens without the person concerned knowing anything about it," said Murray.

Not only governments but also businesses should refrain from doing business with American cloud providers, experts advised in the Webwereld article. Professor Jeanne Mifsud Bonnic, expert in European technology law and human rights at the University of Groningen, reckoned that the current situation creates a "beautiful opportunity" for European cloud providers to make some headway in the European market.

Concerns about the affect the Patriot Act has on data stored by US companies in Europe have also been raised in the European Parliament.

US government criticised

According to Sophie in ‘t Veld, MP for the democratic ALDE party in the European Parliament, this is a very serious problem. "This is not how we deal with each other," In ‘t Veld said. "The European Commission should say to the American government: ‘You have to respect our rules.’"

According to In ‘t Veld, the American government should not be allowed to have a back door into cloud data stored in Europe.

However, simply excluding American cloud providers from government bids is not the way to solve the problem, In ‘t Veld said. She called the approach the Dutch government is considering "economically and politically unwise." American cloud providers should be able to provide services in the European Union and should do that abiding by European laws; the American government has to stay out of that, she said.

The ALDE party asked Viviane Reding, European commissioner for justice, fundamental rights and citizenship, to remedy the situation. Reding should contact the US government to "ensure that EU data protection rules can be effectively enforced and that third-country legislation does not take precedence over EU legislation," ALDE said.

A privacy issue?

Jim Dempsey, vice president for public policy at the Centre for Democracy and Technology (CDT), said he is not sure if the questions raised about American cloud providers in Europe are truly about privacy. He said: "Is this a privacy issue? Or do governments want to keep the access to data in their own hands?"

According to Dempsey, every country in the world has its own version of the Patriot Act. "No company in the world can guarantee that it will not disclose information to governments," he said. The Dutch government itself could easily decide to turn over information to the US. "Also the Dutch government is likely to demand access to data of Dutch citizens stored in the US," he said.

In the meantime, American cloud providers tiptoe around the subject. Neither Microsoft nor Google were willing to comment on the issue, and IBM and Amazon did not immediately respond to questions. The White House press office also remained silent on the matter.